03-06-2013

Tesoro closes the purchase of BP's southern California refining and marketing business

Tesoro Corporation announced today that the Company has closed the acquisition of BP's fully integrated Southern California Refining and Marketing business, including the 266 thousand barrel per day ("mbpd") high conversion Carson refinery and over 800 dealer operated retail stations. The purchase price for the assets was $1,075 million. Inventory at market value and other working capital totaled another $1,350 million.

Additionally, Tesoro and Tesoro Logistics LP today announced that TLLP closed the acquisition of the first portion of the integrated Carson logistics assets for total consideration of $640 million. These assets include six marketing and storage terminal facilities with a total combined throughput capacity of about 225 mbpd and approximately 6.4 million barrels of total storage capacity. The transaction price included cash of $544 million and Tesoro Logistics equity valued at $96 million.  

The remaining Carson logistics assets, consisting of dedicated storage capacity, pipelines and marine terminals, are expected to be offered to TLLP within twelve months, and have an expected market value of between $450 and $550 million.

The Company funded the transaction with about $550 million of cash, $544 million of cash proceeds from the acquisition of logistics assets by TLLP, $500 million in term loan borrowings and about $700 million in borrowings under Tesoro Corporation's revolving credit facility, which was recently expanded to $3.0 billion.

"We are pleased to have closed this transformational acquisition," said Greg Goff, President and CEO. "This transaction is a unique opportunity for Tesoro to combine the best aspects of two West Coast refining, marketing and logistics businesses resulting in a more efficient world-scale integrated refining, marketing and logistics system."